Finance b0y!

Some people prefer to use and pay for the services of a broker because they feel more comfortable making decisions about their finances with the interactive guidance of a licensed professional.

When using a discount stock broker for financial guidance, one must be made aware that they do get paid on a commission, based on the stock/mutual fund they sell, and also through Class Distinction/Operating Expense Fees/Services Fees/Shareholder Fees. Thus, a conflict of interest arises concerning a stock broker who offers his/her service as a financial planner, because their revenue is generated as a direct result of your investment in the stock/mutual fund that they broker to you. Thus your return on investment may not be as great, and the advice they give you might not be in your best interest. However, some mutual funds and stocks can only be purchased through a broker: in such cases their services are required to purchase the financial instrument in question.

A word of warning: If you receive a call offering you shares at what seems an unfeasibly good deal (e.g., an imminent IPO which will cause the price to ‘go through the roof’), then you are probably being contacted by a boiler room. These are typically not registered with the FSA and could be in a foreign country where fraud laws are lax. If you suspect that you have been contacted in this way, see Boiler room for more information.

When most people think of refinancing, they think of mortgages. This might be because car loan refinancing is one of the best kept secrets in the lending industry. Your current lender, who gave you that less than desirable interest rate to begin with, surely isn’t going to tell you how refinancing can save you thousands of dollars over the life of your loan. After all, the more interest you pay, the more the lender benefits. But, the fact is, motorcycle loan or any auto loan refinancing is available and it does work.

By refinancing, you can get a lower interest rate, and in turn, lower your monthly payment.

Even if the rate differs by only one or two points, you can still save hundreds of dollars. If you had bad credit when you got the loan, but have since improved your credit score, that 18 percent rate could be dropped to 6 or 7 percent. Depending on the size of your loan, that could save you as much as $100 every month.

Forward transaction: One way to deal with the Forex risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a few days, months or years.

Futures: Foreign currency futures are forward transactions with standard contract sizes and maturity dates — for example, 500,000 British pounds for next November at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.

Swap: The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not contracts and are not traded through an exchange.

Spot: A spot transaction is a two-day delivery transaction, as opposed to the Futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the Spot market.

What does financial planning covers? Financial planning should ideally cover all areas of the client’s financial needs and finally to end with the achievement his goals and objectives in each of the targeted areas. Usually, the scope of financial planning would include the following:

•Risk Management and Insurance Planning: To make provision against cash flow risks through sound risk management and insurance techniques:

•Investment and Planning Issues: Planning, creating and managing capital accumulation to generate future capital and cash flows for reinvestment and spending.

•Retirement Planning: Planning to ensure financial independence when one retires.

•Tax Planning: Planning for the reduction of tax liabilities and the freeing-up of cash flows for other purposes.

•Estate Planning: Planning for the creation, accumulation, conservation and distribution of assets.

•Cash Flow and Liability Management: Maintaining and enhancing personal cash flows through debt and lifestyle management.